After a fleeting buyer’s market in the fourth quarter of 2022, San Francisco home sales fell 35% year-over-year in May 2023, while the Bay Area as a whole saw homebuying activity decrease by about 13%, according to SFGate. Inventory is still at a historical low, with the past 12 months seeing the smallest share of new listings coming on the market in more than 20 years.
Interest rates exceeding 6.5% will continue to strain supply during the next several months, and without an increase in for-sale supply, Bay Area prices will remain historically high. That scenario creates a slower, more balanced market in which homes are taking much longer to sell.
Sellers are less likely to want to sell their homes due to what’s often called the “mortgage lock-in effect,” and buyers still don’t have access to the amount of inventory needed to bring prices down. Typically, that results in a “balanced market,” something Redfin real estate agent Andrea Chopp said she feels like she’s experiencing for the first time. “There are buyers out there, but they’re more cautious and more picky. They're not as willing to dive into every property like they were,” Chopp said. “... In general, houses are receiving less offers than they used to, and they're sitting a little longer.”
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